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Racial Earnings Differentials and Performance Pay

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  • John S. Heywood
  • Patrick L. O’Halloran

Abstract

This paper presents an information model in which workers receiving output-based pay experience less racial earnings discrimination than those receiving time rates and supervisory evaluations. Tests using the National Longitudinal Survey of Youth reveal no racial wage differential among male workers paid output-based pay while confirming a significant differential among those paid time rates. In addition, the racial wage differential among those receiving bonus pay, usually based on supervisory evaluations, tends to be larger than for those not receiving such bonuses.

Suggested Citation

  • John S. Heywood & Patrick L. O’Halloran, 2005. "Racial Earnings Differentials and Performance Pay," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
    • Handle: RePEc:uwp:jhriss:v:40:y:2005:i:2:p435-452
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    Citations

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    Cited by:

    1. Chiang, Hui-Yu & Ohtake, Fumio, 2014. "Performance-pay and the gender wage gap in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 34(C), pages 71-88.
    2. Conrad Frederick G. & Couper Mick P. & Sakshaug Joseph W., 2016. "Classifying Open-Ended Reports: Factors Affecting the Reliability of Occupation Codes," Journal of Official Statistics, Sciendo, vol. 32(1), pages 75-92, March.
    3. Mehrzad B. Baktash & John S. Heywood & Uwe Jirjahn, 2022. "Performance pay and alcohol use in Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 61(4), pages 353-383, October.
    4. Benjamin Artz & Colin P. Green & John S. Heywood, 2021. "Does performance pay increase alcohol and drug use?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(3), pages 969-1002, July.
    5. John S. Heywood & Daniel Parent, 2012. "Performance Pay and the White-Black Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 30(2), pages 249-290.
    6. Baktash, Mehrzad B. & Heywood, John S. & Jirjahn, Uwe, 2023. "Does Performance Pay Increase the Risk of Marital Instability?," GLO Discussion Paper Series 1305, Global Labor Organization (GLO).
    7. Sylvia Fuller & Lynn Prince Cooke, 2018. "Workplace Variation in Fatherhood Wage Premiums: Do Formalization and Performance Pay Matter?," Work, Employment & Society, British Sociological Association, vol. 32(4), pages 768-788, August.
    8. Colin P. Green & John S. Heywood & Nikolaos Theodoropoulos, 2012. "Performance Pay and Ethnic Wage Differences in Britain," University of Cyprus Working Papers in Economics 06-2012, University of Cyprus Department of Economics.
    9. Janice Fanning Madden & Alexander Vekker, 2017. "Output-Based Performance Pay, Performance-Support Bias, and the Racial Pay Gap within a Large Retail Stock Brokerage," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(4), pages 662-687, October.
    10. Li Tan, 2021. "Imputing Top‐Coded Income Data in Longitudinal Surveys," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(1), pages 66-87, February.
    11. Victor Maas & Raquel Torres-González, 2011. "Subjective Performance Evaluation and Gender Discrimination," Journal of Business Ethics, Springer, vol. 101(4), pages 667-681, July.
    12. Cornelissen, Thomas & Jirjahn, Uwe, 2012. "September 11th and the earnings of Muslims in Germany—The moderating role of education and firm size," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 490-504.
    13. Schoen, Constantin & Rost, Katja, 2021. "What really works?! Evaluating the effectiveness of practices to increase the managerial diversity of women and minorities," European Management Journal, Elsevier, vol. 39(1), pages 95-108.
    14. Tony Fang & John S. Heywood, 2010. "Immigration, Ethnic Wage Differentials and Output Pay in Canada," British Journal of Industrial Relations, London School of Economics, vol. 48(1), pages 109-130, March.
    15. Méon, Pierre-Guillaume & Szafarz, Ariane, 2011. "The modern corporation as a safe haven for taste-based discrimination: An agency model of hiring decisions," Labour Economics, Elsevier, vol. 18(4), pages 487-497, August.
    16. Uwe Jirjahn & Erik Poutsma, 2013. "The Use of Performance Appraisal Systems: Evidence from Dutch Establishment Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(4), pages 801-828, October.
    17. Alan Manning & Farzad Saidi, 2010. "Understanding the Gender Pay Gap: What's Competition Got to Do with it?," ILR Review, Cornell University, ILR School, vol. 63(4), pages 681-698, July.
    18. John S. Heywood & Daniel Parent, 2017. "Performance Pay, the Gender Gap, and Specialization within Marriage," Journal of Labor Research, Springer, vol. 38(4), pages 387-427, December.

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